Accounting News and Notes

Duluth CPA on Trust Fund Monies: Working with the IRS to Address Civil Penalties

If your company has employees or collects sales tax, the dollars withheld from payroll and sales taxes collected are technically withheld “in trust.” Accordingly they have legal exposure to both the company for payment, as well as those personally responsible parties who knew about and controlled such payments. The  responsible party is generally defined as those who were most/responsible for payments that would well extend to check signers, accounts payable, officers, and financial staff. This assessment is for one personally who collected trust monies which they unduly did not remit to the appropriate taxing/legal authority. As these monies are withheld in trust, they do not belong to the company/business. The IRS and individual states take a very dim and stern view of all those who unduly use their money. The 100% penalty may be assessed to the responsible parties making them personally responsible for any collected and unpaid trust fund monies. Having served as a CPA in Metro Atlanta for decades getting behind in the payment of your company’s payroll taxes is the fastest way to financial ruin and is essentially the illegal conversion of IRS/State Trust Monies to unauthorized use.

When a  business is not able to pay its staff payroll taxes/remit collected sales taxes as due, it is a clear warning side that the business model is upside down. Many times it would indicate that the margins of a business are not adequate to support the business’ present staffing levels and overhead, it could also be an indicator that the business is not properly leveraged/financed. In either case it is cause for drastic action that will most likely result in an immediate change in staffing levels and consideration to immediately close the business. A business cannot sell itself out of a problem, these options are most always the best course.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

Contact HIS CPA PC (A Christian CPA Firm) today.

Award Winning Atlanta CPA

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

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Related posts:

1. Duluth CPA Illustrates Including the 100%/Civil Penalty When Addressing IRS Representation Issues & an Offer in Compromise
2. Atlanta CPA on Unpaid Personal Income Taxes, Trust Fund Assessments and the 100% Penalty www.HisCPA.com
3. Atlanta CPA Saves Metro Atlanta Client $120,000 in Payroll Tax Penalties
4. Duluth CPA on Utilizing a CPA to Address Back Tax Issues During an IRS Audit
5. Gwinnett CPA Shows How to Resolve IRS Tax Issues

This entry was posted on Wednesday, August 19th, 2009 at 1:48 pm and is filed under Atlanta Payroll Tax Issues & Administration, Trust Fund Assessments & the 100% Penalty.
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